Cream Rises

By Susan S. Nichols — April 01, 2009

"In 2009, the cream will rise to the top." So said industry pundit Marshal Cohen, chief industry analyst for The NPD Group, at last month's Annual Executive Summit of the American Apparel & Footwear Association (AAFA).

Cohen was talking about the need for the "dramatic change" that is necessary in the apparel and retail industry in order to get the consumer "engaged" again.

Noting that retail is still bloated - there is 20 square feet of retail space per person in the United States - Cohen said it's the perfect time for firms to reinvent themselves.

Newly inducted AAFA chairman Carol Hochman, president and CEO of Danskin, agreed. In an interview with Apparel, she said there is a "significant shift in what people are buying. It's more of an item business, requiring you to be more innovative in your business."

Hochman added that during the current environment, especially, retailers are relying on manufacturers' wisdom to help them determine what belongs on the floor. Hochman said: "If we're ever going to get this price promotion monkey off our back, we're going to have to get back to the price/value ratio, which is so important to the consumer."

Pointing to the success of such innovative products as phone accessories, Cohen said the apparel industry shouldn't let itself be "out-fashioned" by other industries.

"The merchandise must be compelling and it must tell a story," he said.

Cohen said the footwear industry is doing a better job than the apparel industry in injecting passion, new products and trends to compel the customer to buy, as he encouraged the industry to embrace risk, change and color. "Put things in play; make a move," he implored. "Don't just stand there."

Also speaking to the need for innovation was Clara Nin, external business development manager, fabric care, The Procter & Gamble Co. (P&G). The $80 billion company, which has more than 300 brands, relies on innovation for at least 50 percent of its growth.

Nin says the consumer products giant relies on "open innovation" to generate ideas, which includes finding solutions from smaller companies, getting "cooked" ideas from other domains (an example is when P&G purchased the Swiffer product), and collaborating with suppliers, competitors and others. "You have to leverage the diversity of the world," she said.

P&G even has a website (pgconnectdevelop.com) where potential partners can submit their innovations. According to the site, P&G is looking for "game-changing products, technologies, business models, methods, trademarks, packages or designs that can help deliver new products and/or services to improve the lives of the world's consumers."

Innovation has become one of the newer catch phrases for what our industry needs to embrace, but it's no passing fad. Now, more than ever, it will be the innovative firms that prosper. In next month's issue of Apparel, we're proud to present the 2nd Annual Apparel Innovators. You'll get an inside look at what 40 successful apparel brands, retailers and manufacturers are doing to keep themselves ahead in the game of innovation.

Don't miss it.

Susan S. Nichols is publisher of Apparel.
She can be reached at snichols@apparelmag.com.